I recently received a question as to which drug class or population/disease state, if ever, would I recommend a zero dollar member cost share. This is a great question, and there actually are some situations in which I would recommend use of a zero dollar copay.

First, let me briefly review why I do not recommend $0 copays as a standard part of the benefit design, even for classes such as diabetes and cardiovascular disease.

The primary reason is that most patients do not stop taking medication because of cost, particularly in a commercially insured population (see figure for common reasons for non-adherence). Accordingly, copays are being waived without any possibility of benefit for the vast majority of patients. This known fact is evidenced in the small improvements that are seen in compliance after implementing a copay waiver program—averaging 2-4 percentage points and representing 1-2 weeks of additional therapy. Targeting copay waivers to patients at high risk for adverse events and who truly have cost as a financial barrier would be an ideal approach, but it raises HR and equity issues that are not easily resolved.

The second consideration to keep in mind is the potential for fraud. I have heard from frustrated employers who implemented zero dollar copays for chronic conditions only to find that employees began sharing medications with family and friends with the same condition. Quantity limits can help control this potential problem partially but not entirely. I have not studied this phenomenon personally so I cannot speak to the magnitude of the problem.

I would however, recommend use of a zero dollar copay program under certain conditions. First, zero dollar generic copays are a great tool for promoting use of lower cost, therapeutic alternatives for patients currently using brand medications. I would consider them for therapy classes for which you have step therapy in place as the two programs are complementary. Step therapy will promote generic use for new users, and the $0 generic copay program is a carrot strategy for promoting generics with current brand users. The $0 generic copay helps to grab the member’s attention and provides an extra little incentive for making the switch. I would not make the copay waiver indefinite, however. Six months of free generics is sufficient. Based on my experience and rigorous evaluations, these programs have a solid ROI; and the patient saves money too of course.

Second, a population for which I MIGHT consider a $0 generic copay is hypertension and cholesterol, and other cardiovascular medications in seniors. The rate of adverse cardiovascular events (absent treatment) is much higher in the senior than in the commercial population; so IF price elasticity is at least as high as we see with commercial members, there is the potential to materially reduce the rate of adverse cardiovascular events and to achieve a net savings from reduced hospitalizations. The key to this decision is determining the actual price elasticity of demand within your senior population. As little contemporary public data is available on price elasticity within the senior population, individual vendors will have to assess the elasticity within their own data. Once identified, a simple analytic tool, like the VBID calculator, can be used to determine the potential reduction in hospitalizations and medical spend that can be achieved. Of course, implementing copay waivers in the Medicare Part D program is a greater administrative challenge than a commercial plan or retiree plan, which would be a relevant consideration.

A third population for which I would PILOT a $0 generic program is patients at HIGH risk for adverse cardiovascular events but who have NOT initiated pharmacotherapy. The classic example is the patient with a recent myocardial infarction who has not initiated a statin and/or beta-blocker. While cost is not likely to be the reason for non-initiation for most patients, it might be a useful short-term incentive, when combined with the right intervention, for encouraging use. I would say pilot first because it simply may not be effective and there is the risk that a zero price could actually deter use if it serves as a quality indicator for non-initiating patients. Another growing challenge is that many patients will appear as non-users because of the $4 generic programs which do not always result in a claim being submitted.

For those of you looking for more information on copay waivers, see the recent Fairman editorial in JMCP and a paper Steve Melnick and I published last year on the potential financial savings from copay waivers.